PRESS RELEASE 21 JANUARY 2009
- Tapiola Pension’s investment income was -8.3 percent in 2008 (4.1% in 2007).
- The solvency margin which determinates the financial strength was 16.2 percent in relation to the technical provisions and 2.9 times the solvency limit.
- Customer bonuses are estimated to reach approximately EUR 13 million (EUR 19.6 million).
According to advance financial statement figures, Tapiola Pension’s investment income at current value was about -8.3 percent in 2008 (4.1 percent in 2007). Despite the negative investment income, Managing Director Satu Huber considers the result good in relation to the market conditions and industry over long term.
The solvency ratio of Tapiola Pension was approximately 16.2 percent (21.3%) and the solvency margin was 2.9 (1.8) times the solvency limit. The act on authorized pension providers was amended in December and therefore the solvency figures of 2007 are not comparable.
According to the preliminary figures, the customer bonuses are estimated to amount to approximately EUR 13 million (EUR 19.6 million) or 0.2 percent (0.4%) of the total payroll.
Tapiola Pension’s Investments Focus on Perseverance
Tapiola Pension has successfully decreased the proportion of equity investments. At the end of 2008, the proportion of equity investments was 15 percent of the total investment portfolio and over 70 percent was allocated to bonds.
Already at the end of 2007, the allocation between different asset categories was modified by reducing the proportion of equities and units below the level of 30 percent of all investments. This action was taken in order to prepare for the unstable market development of 2008.
– In addition, we sold international equities and equity-linked funds well in advance before autumn 2008, Investment Director Hanna Hiidenpalo says. According to Hiidenpalo, Tapiola Pension has not felt pressure to sell Finnish equities.
– Tapiola Pension emphasizes perseverance in its investments and this investment policy has not been changed. We only invest in well-known objects which can be followed-up. Consequently, hedge funds have never played a significant role in Tapiola Pension’s investment allocation. The liquidity problems and non-transparent pricing of hedge funds have become particularly evident this year, Hiidenpalo says.
Hanna Hiidenpalo has a cautious view of the market development in 2009.
– On the equity market, the greatest uncertainty factor is the results of the companies. In addition, the real estate investment return indicates challenges on the real estate market, Hiidenpalo states.
Fixed-income investments brought the best return in 2008. Therefore fixed-income investments are emphasized in the allocation. Thanks to the significant reduction of interests and the low risk profile, the return of the fixed-income investment portfolio increased from the previous years. The liquidity of Tapiola Pension’s fixed-income investment portfolio was improved during the summer by increasing the share of state loans and certificates of deposits.
– It is important that fixed-income investments can easily be converted into money. The premium loan volume was multiplied during 2008, and therefore portfolio liquidity is emphasized also in the future. I expect that the volume continues to increase, Managing Director Satu Huber estimates.
The figures are preliminary. The results 2008 (unaudited) of companies included in the Tapiola Group are presented for the media on 16 February 2009 at 9.30 am.
Additional Information:
Investment Director
Hanna Hiidenpalo
09-453 3310
Managing Director
Satu Huber
09-453 2169
Corporate Communications/Tiina Niemi